


e 





- 





seth fae arent 


of His Excellency, 


WESTMORELAND DAVIS 


Governor of Virginia 


AND THE 


ION. ROSEWELL PAGE 


Reema” 


Second Auditor of Virginia 


Before the Convention of the Virginia Good 


- Roads Association, held in Richmond, Vir- 


ginia, January 14, 15 and 16, 1919 


t | RICHMOND 
4 Davis Borrom, “SUPERINTENDENT PUBLIC PRINTING 


etoty, 





Digitized by the Internet Archive: ; 
in 2021 with funding trom 
University of North Carolina at Chapel Hill 


“https //archive.org/details/add ressesofhisex00vi c 


={e XE 
ake 


How to Get Good Roads in Virginia 


Westmoreland Davis, Governor of Virginia 





Mr. CHAIRMAN,, LADIES AND GENTLEMEN :— 


It is always a pleasure for me to meet in conference with my fellow 
citizens, but especially is this the case when I feel that we are to enter 
upon a great work for the development of Virginia—the building for 
her of a great. system of highways. 

When I was asked to speak to you today upon ‘‘future highway im- 
provement in Virginia,’ I readily accepted, as it seemed to me an oppor- 
tunity for us to do a great work for our State and to sound a note of 
enthusiastic endeavor, which will find its expression in roads built on 
the ground rather than in rhetorical phrases recorded on paper. 

When I offered myself as a candidate for Governor of Virginia, I 
issued to the people a platform, which contained my pledges as to official 

, action, if elected. To this, when questions of State present themselves 
for consideration, I always make reference; for the pledges that I have 
made to the people of Virginia and upon which I was elected are the 
guiding spirit of my administration. 

L have promised in my platform and in my inaugural address to the 
utmost of my power to encourage the building of goods roads, and now 
that the war is ended I feel that we should address ourselves seriously 
to this important subject, 

The aid offered by the federal government to the States is distinctly 
unsatisfying, in view of the fact that the mobility of an army is dependent 
upon the character of the roads used by it as well as by the fact that 
heavy trucks are being used in the postal service for parcel post and 
mail delivery. Indeed during this war enormous army trucks driven at 
great speed in large convoys destroyed or did irreparable damage to 
bridges and highways connecting military establishments as well as 
jeopardized the safe and prompt movement of war supplies. A statesman- 
like grasp of the proper relation between Nation and State in the ad- 
ministration of the affairs of our people would suggest the building by 
the federal government of these trunk lines for military and postal 
service. 

Virginia is sparsely settled, having over 10,000,000 acres of land not 
under cultivation, and which can only be brought into use by the de- 
velopment of such highways as will facilitate the transportation of farm 
products and the easy access of farm population to city conveniences. 
Such highways are of substantial benefit to the owner of motor vehicles. 
It is estimated that upon an average yearly travel of five thousand miles, 
the average automobile will save twenty dollars in the cost of gasoline 
alone when good roads instead of dirt roads are used. The benefit de- 
rived by the farmer from good roads is greater still. His teams haul 
more auickly heavier loads with less wear and tear upon either team 
or vehicle; he saves one-half the cost of hauling. his crops to market. 

Good roads have great educational and social value; schools and 
neighbors are ready of access and community centres are quickly de- 
veloped. Improved roads increase facilities for marketing, add to farm 
values and to the State’s economic wealth to an amount that will pay 
many times the cost of the original road construction. Virginia is rich 
in historic value and tourists will find in her natural beauties and scenic 


Southern Pamphlets es 595848 


Rare Book Collection 
UNC-Chapel Hill 


4 


effects wonderful attraction. These itinerant parties will scatter wealth 
where they go as does the touring population in Vermont, New Hamp- 
shire and Massachusetts in this country, and as in Continental Eu- 
rope. Then too, there should be public works under construc- 
tion in the State to aid the unemployed, and good roads are a condition 
precedent to the successful placing of such of our returning soldiers 
as may be seeking to establish for themselves homes on our farming lands. 

Various methods have been tried in different States to secure funds 
with which to build roads. Jn Wisconsin the counties bear the cost of 
construction of the State Highway System, the State paying for the up- 
keep. This plan would not be applicable to Virginia for the supervisors 
of many counties might not care to bear the burden involved: nor would ~ 
‘they be likely to adopt the type of road which the heavy traffic of the 
future will demand. In Kansas federal aid is combined with county aid 
which is had by an assessment of benefits upon the adjacent land owners. 
It is not likely that our farmers would be content to assume the cost 
of highways constructed along this plan as with our lower values and 
the high cost of construction our farmers would find the amount neces- 
sarily assessed distinctly onerous, if not confiscatory. 

There are really but two plans worthy of consideration, one the 
issuing of State bonds after our Constitution has been amended, and the 
other by paying for the roads out of the revenues of the State derived 
from taxation. 

A program of State highways adopted by the legislature in 1918, 
and involves the permanent improvement of 3,740 miles of road. Pro- 
vision has been made for maintenance of the system, and for State aid 
for the construction and maintenance of county highways which serve as 
laterals. 

For the realization of this program the State has at present the 
following possibilities: 


a—A three-tenths of a mill tax equivalent to approximately $375,000 
a year which is devoted entirely to construction in connection 
with the State highway program. 

b—A State appropriation of $510,000 covering the years 1918 and 
1919 to meet federal aid on State roads. 

c—-Federal aid which in the five years, 1917-21, inclusive, will 
amount to approximately $1,500,000. 

d—The income from automobile licenses which in the fiscal year 

1918-19 will amount to about $670,000, the major portion of 
which must be devoted to re-surfacing, construction and repair 
of such partially improved roads as are already included in the 
State Highway System and which total approximately 1,500 
miles. At the discretion of the Highway Commissioner, a part 
of this may be, but is not at present, devoted to the mainte- 
nance of county roads. 

e—A State appropriation of $300,000 per year to be devoted to the 
maintenance of already constructed county highways and con- 
struction in such counties as have not a developed highway 
system in need of maintenance. 

f—The use of between 1,000 and 1,200 prisoners for the mainte- 
nance and guarding of which the State appropriates $250,000 
and the services of whom may be evaluated at anywhere be- 
tween $250,009 and $600,000 annually. 


This gives a total of approximately $2,150,000 annually under the present 
plan to be devoted to the construction, reconstruction, re-surfacing 
and maintenance of the entire highway system of the State, includ- 
ing the State and county programs. Of this sum approximately 

5 $970,000, whieh includes $300,000 State aid to counties, and $670,- 


5. 


€00 to automobile licenses, is devoted almost entirely to highway 
maintenance and is probably inadequate for this purpose. 


This leaves a maximum balance of $1,180,000, which may be annually 


spent for construction of the State Highway System. It is estimated 
that the average price of desirable road construction in this State’ 
program is to cost $20,000 per mile. At this rate it would require 
about sixty-five years to carry out the State highway program as 
passed by the General Assembly in 1918, eliminating any increase of 
that program made necessary by the development of Virginia’s 
population and economic resources, and disregarding the fact that 
the roads laid would have to be replaced several times during this 
period. 


It becomes immediately apparent that such a rate of road construction 


is out of the question if the Commonwealth of Virginia is to keep 
pace with its own needs and is to enter into successful economic 
competition with other States, which are entering into large con- 
struction programs. 


It is impossible for anyone who has not given considerable thought, sup- 


ported with an intimate knowledge of Virginia’s topography, dis- 
tribution of population, and resources to make any complete esti- 
mate as to the highway needs of the State. In fact, probably any 
estimate made even through such special knowledge will be entirely 
obsolete in a brief period of years owing to natural rapid develop- 
ment by even the beginnings of a comprehensive highway system 
and the impetus given this development. 


It may be assumed for purpose of argument that the State Highway 


The 


The 


System will involve only a permanent type of road construction varvy- 
ing in degrees of permanency with the character of transportation 
and the growth and change of transportation needs. It is possibly 
fair to assume that such highways will on an average cost ‘$20,000 
per mile for original construction. On this basis it would cost ap- 
proximately $75,000,000 to construct the present State Highway 
System in permanent form. This is too large a sum of money tc ke 
considered at the present moment, but it may not seem so stupendous 
in future years. 

present problem then is to determine a sum of money which will 
be adequate to develop the essential highways which go to make up 
this 3,740 miles of a State Highway System. This again is a problem 
for the authorities in charge of highway construction: in Virginia, 
but it is probably safe to estimate that 1,200 miles of road con- 
struction done in the immediate future would lay the foundation 
upon which may be built a complete highway system in coming 
years. 

cost of these 1,200 miles would approximate $25,000,000. Virginia’s 
problem, therefore, is to raise and spend a sum of $25,000,000 during 
such a limited period of years that the public may notice an appre- 
ciable inerease in their highway system, may benefit accordingly 
from increasing economic values, and may be educated thereby to 
the essential need of constructing a complete system. 


Should it be determined to issue twenty-five millions of bonds, the 


payment of interest and principal will have to be met by taxation. It 
may be of interest to know what other States are doing, as reported by 
the American Highway Association in the ‘‘Good Road Year-Book, 1917”: 


State Bonds Area Population 
Californin tis tak niece § 33,000,000 158,297 sq. miles 2,983,000 
Florida (counties) .. 11,000,000 58,666 sq. miles 893,000 
LTE ONS! Ra tars ke tae: ate 60,000,000 56,665 sq. miles 6,131,000 
Marvid itd: set im ets + exe 18,470,000 P22 Sy sales 1,360,000 
ING WoL OT Kya. sk cameuy> 160,000,000 49,204 sq. miles 10,366,000 


Pennsylvania ....... 50,000,000 46,126 sq. miles 8,510,000 


26 


In addition the following bond issues are under discussion: 


State Bonds Area Population 
Minnesotan if alice 100,000,000 57,980 sq. miles 3,074,000 
North xCarolina iis se 23.0.000,000 . .69,127 sq. miles 445518000 
Washinston * <u 40070003009 52,426 sq.-miles .—. 2,400,000 


Michizane) gat pattem ts $ 50,000,000 84,682 sq. miles 2,265,000 


These figures are hardly more than indicative. Many States not 
enumerated have extensive systems of improved highways, which have 
been built from annual appropriations, or by county bonds, or both. 

It has been seen that bonds would be only issued after the amend- 
ment of our State Constitution. and it is scarcely probable that construc- 
tion of highways could be undertaken with the proceeds of the sale of 
such bonds until 1923. and that this plan would entail a large outlay 
in the payment of interest. 

In Illinois, at the election in November, 1917, the issuing of sixty 
million dollars of twenty year bonds for the purpose of creating a five 
thousand mile road program was authorized, the entire.cost to 
be borne by the automobile owners. This proposal proved immensely 
popular with the voters, because a vast majority of them were not re- 
quired to pay any direct cost of road construction. On the other hand 
automobile owners in general were glad to assume the burden inasmuch 
as there were distinct benefits far outweighing the cost. By this method 
Illinois was able to raise ample funds to pay the principal and interest 
on this large bond issue, and had practically as much more available for 
other purposes from the same source. The idea has proved popular and 
similar measures are being discussed in Minnesota and Washington. The 
feasibility of such a program for Virginia may be decided only after a 
study of automobile license revenues in connection with certain other 
State revenues, inasmuch as automobile licenses are now segregated for 
road maintenance. There is a distinct advantage to such segregation 
inasmuch as it provides a constantly increasing fund for the purpose 
of highway maintenance. 

The present automobile rates on typical cars for a number of States, 
as reported by the American Automobile Association, are as follows: 


State Ford Dodge | Packard 
INGWAUY-OrKe eee): eee $ 5.00 $ 5.00 $15.00 
ORIO NY ee she eee FORA K) 5.00 5.00 
LINDOIS.. lan ere eee 6.00 6.00 16.00 
Pennsylvanias «meee: is 10.00 10.00 Lon00 
MiChiSanset ee 2 .aeemanee 9.25 aba b SAS 23.00 
WASCOUSIN =i a, oe ee 10.00 10.00 10.06 
Wary Ledeen sti eet aa 13 20 14.40 28.86 
Vireiniaie’,. seen soles. 8.80 9.60 19.20 
TONTCSSEO. atten. tore 6.60 7.20 14.40 
POUISIAN Ae ee caer ate: 5.50 6.00 12.00 
LORS Wy) ee See een 500 5 


. 00 15.00 


An increase of fifty per cent in the automobile licenses in Virginia 
would affect only a limited number of persons, who are probably most 
able to bear the small tax, and if they knew that the sum was to be 
used for the construction of highways, would be glad to pay the increase. 
It is hardly to be assumed that any person in purchasing an automobile 
would refrain because of the imposition of an annual State tax. It is 
doubtful, if probable, purchasers would refrain from owning an auto- 
mobile in Virginia, if the tax were even double the increased tax im- 
posed. Under these circumstances and considering the limited wealth 


i 


of the State, in proportion to its area, its undeveloped resources and its 
needs of roads, it seems entirely feasible that a tax on automobiles should 
be increased even higher than the rate prevailing in most States. 

The incomplete return from automobile licenses for the year March 
1, 1918, to March 1, 1919, is $648,454. Had the tax been increased 
fifty per cent during this year, the return would have been practically 
a. million dollars. 

If bonds are issued, the use of licenses to meet the resulting finan- 
cial obligations will not be necessary until 1923. At this date and fol- 
lowing, judging from past experience, there would be a considerable in- 
erease from this source in revenues. 

Automobile licenses, as indicated by the books of the State Highway 
Commission, have returned to the State in the past few years the follow- 
ing sums of money: 


Percentage of increase 


Year Amount of tax over preceding year 
ey £0 $ 20,669 

1911 35,575 73 

1912 51,245 44 

zis is Bess 80,025 56 

1914 116,188 45 

1915 170,646 : 47 

1916 271,610 59 

Pouey 483,470 4 4 

1918 648,454 32 


Average increase: 50 per cent. 


Evidence that a reasonable future increase in such licenses may be 
anticipated is indicated by the table for a number of typical States, show- 
ing the number of machines, total population, and population per ma- 
chine: 


Number of Machines to num- 
State machines Population ber of persons 
OL anew. aes 297,239 5,181,220 qh 
NEWRY OF Knits sth. co 403930 10,366,778 1—30 
DPT OF Seat ee die ca. oe 285,000 Galo luted 1—22 
Pennsylvania ..... 254.735 8,510,515 1— 33 
Wiseonsin ........ 142,980 Qe hl Oe 1—18 
NETS TaN ems. a eae sone. 17,854 1,360,091 1—28 
AVAtig2a halt Pee exe ape 44,550 2,186,768 1—49 
Tennessee ....... 42,000 2,288,004 1—54 
OUISIAT A occas Sere yt 06 1,829,130 1—72 
Lat 29 a eee: Cie ee 17,065 433,267 1—25 
NCCI ERA TY Bria, oo hens 189,000 3,074,560 1—17 


The possibility of Virginia having the same number of machines in 
proportion to its population as the States of Michigan, Ohio and TH 
nois, is regulated only by the wealth of the people, and the roads which 
the machines use. The roads themselves will directly affect that wealth. 

For the purpose of calculating automobile licenses as a means of 
financing a bond issue, it is assumed that there will be an annual in- 
crease of only ten per cent. in the amount collected from licenses begin- 
ning with 1920, and that only $20,000,000 of bonds will be issued. From 
this estimated revenue is deducted the actual amount necessary to finance 
$20,000,000 of twenty year bonds at four and one-half per cent. The 
remainder is available for maintenance. 


8 


Following is a table of anticipated revenues from automobile licenses 
assuming an increase of fifty per cent. in the rate applicable in 1920, 
with the amount necessary to finance $20,000,000 of twenty year four 
and one-half per cent. bonds, and the balance available for road mainte- 
nance: 


Hstimated Required for Balance available. 
Year revenue bonds for maintenance 
LOS $ 675,000 None $ 675,000 
1919 1,072,000 None 1,072,000 
1920 1,179,000 None 1,179,000 
192 1,296,000 None 1,296,000 
uO22 1,425,000 None 1,425,000 
1923 1,567,000 None 1,567,000 
1924 17 23.000 $ 308,000 1,415,000 
1925 1,895,000 616,000 1,279,000 
1926 2,084,000 924,000 1,160,000 
1927 2,292,000 1,232,000 1,060,000 
1928 2,521,000 1,570,000 981,000 


After 1928 the charges remain steady, while the amount for main- 
tenance increases. Also, it may be reasonably assumed that the State 
would be willing to augment this maintenance money by reasonable 
taxation, if necessary. 


The advantages of this plan are: 
1—$20,000,000 is secured for roads without recourse to property 
taxation. 
2—The money at present received from automobile licenses is left 
practically intact. 


The disadvantages of this plan are: 
j1—State bonds must be issued. 
2—-Work cannot begin until 1923. 
3—It breaks the precedence of leaving all automobile license reve- 
nue for highway maintenance. . 
4—-_Money must be raised in 1920-1922 to meet federal aid. 
5—Imposes an unequal burden upon certain classes. 








Should it be desired to issue $25,000,000 four and one-half per cent 
bonds based upon an available assessment of $1,300,000,000, as of 1918, 
this would require for a five year period, beginning: 


Year Mill Issue 

1924 a7 1L00 3,000,000 
1925 32/100 5,000,000 
1926 42/100 . 5,000,000 
PO 27 68/100 6,000,000 
1928 86/100 6,000,000 


The rate would decrease at the end of five years with the increased 
assessment. In 1942 all bonds would have been issued and paid for. 
This includes provision for federal aid and maintenance, but federal 
aid between now and 1924 has to be provided for by taxation. 

Should the automobile tax be increased by fifty per cent, it is esti- 
mated that this would lessen the tax rate to three-tenths of a mill. 

Should it be desired to construct the highways without issuing bonds, 
_the State could levy a mill tax as well as increase automobile licenses,. 


9 


which would make available a sum for road construction which before 
1928 would pass the amount to be raised by the issue of bonds and 
would be available for work in 1920 instead of 1923. 

It must be remembered that a mill tax is simply a tax of one dollar 
upon the thousand dollars of assessed values, and considering our low 
assessments of property as related to actual value, this would amount, as 
a tax in Virginia, to less than thirty-three and one-third cents on the 
thousand dollars of actual value. I have adopted the mill tax rather than 
the mill and one-half, as I feel that provision must also be made for the 
betterment of rural schools by the next legislature. 

There follows a table of estimated revenue derived from a mill tax 
and increased automobile licenses from 1920 to 1928: 








Automobile Amount 

Year 1 mill tax licenses _ available 
1920 $1,447,000 $1,179,000 $2,626,000 
Sone Wai 1,548,000 1,296,000 2,854,000 
1922 1,625,000 1,425,000 3,050,000 
1928 1,706,000 1,567,000 3,273,000 
1924 15:79:38,000 1,723,000 3,516,000 
1925 1,882,000 1,895,000 aoe .000 
1926 2,013,000 .2,084,000 4,097,000 
1927 2,113,000 2,292,000 4,405,000 
1928 2,218,000 2,521,000 4,739,000 
$16,345,000 $15,982,000 $32,347,000 


It is assumed that the automobile license money will be divided be-- 
tween maintenance and construction on the basis of two-thirds to.main- 
tenance and one-third to construction, inasmuch as licenses are being 
increased one-third for the latter purpose. On this basis the amount 
from these two sources available for construction becomes available as 
follows; from a one mill tax and one-third increase of automobile licenses 
1920-1928: 


One-third Available for 





Year 1 mill tax licenses construction 
1920 $1,447,000 $:73935000 $1,840,000 
\1921 1,548,000 432,000 1,980,000 
19.22 1,625,000 475,000 2,100,000 
LOZSe 1,706,000 522,000 2,228,000 
1924 1,793,000 574,000 2,367,000 
1925 1,882,000 632,000 2,514,000 
1926 2,018,000 695,900 2,708,000 
LOT 2, 143,000 764,000 2,877,000 
1928 2,218,000 830,000 3,048,000 

$16,345,000 $5,317,000 | $21,662,000 


In addition to the foregoing there are two other items which may 
be confidently counted upon in estimating the means available for road 
construction during the ensuing ten-year period. These items are fed- 
eral aid and convict labor. If present federal aid is taken advantage 
of, there will be approximately available from this source: 


Sed MPSA a ee a on Sein. st gs We for, of taspiatior spe Sew. ate aes $100,000 
pS am R i sete tes fata lockel ay sa. tis ciliate Sass ovine iok'a: aye git 200,000 
PE eee re hh oles woh cis Chieioal tard Yo Metks aiSp tree a of eae Gen 8 300,000 
Nog (Verran eet eke Ch an wien tt ameter a Sota tobe Sid tele a. 'eyall's ja am an 400,000 


ie) 


It is believed that Congress will continue this maximum grant in- 
definitely, and in some quarters it is expected that the amount will be 
increased to at least $1.000,000 annually. 

In addition, the State is at present working between 1,000 and 1,200 
convicts on the roads at a cost of about $250,000 a year. Their value 
may be placed at this figure, although their actual value to the State is 
probably $600,000 a year. It may be assumed that one-half of this 
service is devoted to construction and one-half to maintenance. On this 
basis the following amounts are estimated to be available for construc- 
tion in the years 1920-1928: 





1 mill tax and Total 
Year licenses Federal aid Convict labor available 
1920 $1,840,000 $ 500,000 $ 125,000 $2,465,000 
1921 1,980,000 500,000 125,000 2,605,000 
1922 2,100,000 500,000 125,000 2,725,000 
1928 2,228,000 500,000 125,000 2,853,000 
1924 2,367,000 500,000 125,000 2,992,000 
1925 2,515,000 500,000 125,000 2,140,000 
1926 2,708,000 500,000 125,000 3,333,000 
1927 2,877,000 500,000 125,000 3,502,000 
1928 3,048,000 500,000 125,000 3,673,000 

$21,663,000 $4,500,000 $1,125,000 $27,288,000 


In addition the following sums are estimated to be available for 
highway maintenance over the same period, exclusive of county appro- 
priations: 


Year Two-thirds licenses Convict Jjabor Total available 
1920 $ 786,000 $ 125,000 $ 911,000 
1921 864,000 125,000 989,000 
1922 950,000 125,000 1,075,000 
1923 1,044,000 125,000 1,169,000 
1924 1,148,000 125,000 1,273,000 
1925 1,264,000 125,000 1,389,000 
1926 1,390,000 125,000 1,515,000 
Lo27 1,528,000 125,000 1,653,000 
1928 1,660,000 125,000 1,785,000 
$10,634,000 $1,125,000 $11,759,000 


It is probable that the exact amounts to be devoted to construction 
and maintenance should be left for determination by constituted au- 
thority. The combined amounts estimated to be available for construc- 
tion and maintenance, exclusive of county appropriations in 1920-1928 
are: 


Year Construction Maintenance Total 

1920 $2,465,000 $ 911,000 $3,376,000 
102 2,605,000 989,000 3,594,000 
1922 2,725,000 1,075,000 3,800,000 
1923 2,853,000 1,169,000 4,022,000 
1924 2,992,000 tego 00 4,265,000 
1925 3,140,000 1,389,000 4,529,000 
1926 Oro GB nOw) 1,515,000 4,848,000 
1927 3,502,000 1,653,000 5,155,000 
1928 3,673,000 1,785,000 5,458,000 


$27,288,000 


$11,759,000 


$39,047,000 


11 


The foregoing plan has these advantages: 


1—The legislature meeting in 1920 can levy the one mill tax and 
increase automobile licenses permitting contracts to be let and 
work begun the same year, 


2—The total amount collected and spent in construction in the fol- 
lowing ten years from these two sources is $21,662,000, as 
compared to $25,000,000, proposed issue of bonds. 


d3—In 1928 there will be no debt outstanding, and the work can 
be continued indefinitely if the public is so disposed. 


4—-All money raised will go into actual road construction, while 
in event of bond issue approximately $10,000,000 must b 
spent for interest. 


5—The increase in automobile licenses is approximately equal to 
the one mill tax rate so that both parties pay for, and probably 
benefit equally from the improvement. 


Experience has shown that it is idle in these days of heavy traffic 
to build lightly constructed highways and I have endeavored to plan for 
a system that will prove a boon and lasting benefit to our State. If we 
are to end the discussion of the benefits to be derived from good roads 
and to enter upon their building, we must be prepared to pay for them. 
I suggest that the next legislature be known as a “Good Roads Legisla- 
ture,’’ and that candidates be asked to declare themselves upon the sub- 
ject during the coming campaign; that the next legislature be asked to 
levy a mill tax and also to increase the automobile tax which will start 
the State at once to road building. 

It is time the State was rid of its swaddling clothes, so far as the 
Constitution inhibits the sale of bonds for road-building; the Constitu- 
tion should be amended and the people should be permitted to say when 
the question can be submitted to them, whether they prefer to continue 
the policy which shall have been inaugurated, or to issue bonds instead. 

I was elected Governor upon the promise that if permitted to do so, 
I would give the State a system of modern, substantial, highways; I 
renew that pledge and shall leave no stone unturned to accomplish that 
end, which is fraught with happiness and prosperity for our people. 


WESTMORELAND DAVIS. 


12 


GOOD ROADS ASSOCIATION. 
RICHMOND, VIRGINIA. 


10 A. M., January 15, 1919. 


The question is: 
‘“‘A State bond issue for the construction of the Highway Peyctent a 


I deem it no small honor to address this association upon this sub- 
ject. To understand the question, it may be well first ‘to inform you 
of the present status of the State’s bonded debt. 

On the first day of this month the bonded debt of Virginia was 
$23,066,676.85, made up of the four items: 


Riddleberger bonds, under act of 1882 (eee. $ 5,242,554.16 
Century bonds, under act. Of918 92) Ghee 14,905,147.65 
School and college certificates, act of 1892 ........ 254%67,605 2385 
Old and unfunded, under*act’ of 191 Si eee 451,369.17 


The first two items now pay three per cent. interest; the third item 
pays six per cent., except a small portion which pays five per cent; and 
the fourth item pays no interest until funded under the century act 
above mentioned, when it pays three per cent from the interest period 
succeeding such funding. 

The Riddleberger debt is what remains unpaid of the funded debt 
of 1882, called from Senator Riddleberger, the patron of the act in the 
Virginia legislature of that year. The century debt called 2-3’s, because 
it paid two per cent. the first ten years, is what remains of the funded 
debt of 1892, called “‘Century,’’ because the new bonds were payable in 
1992, a hundred years after date. The Riddleberger bonds bore three 
per cent. and are payable in fifty years, or in 1932. The school and col- 
lege certificates which are non-transferable, pay the original interest that 
the old bonds, for which they were issued paid. The reason being that 
the schools and colleges needed the higher rate of interest originally 
paid to maintain themselves, a view which received the sanction of the 
Debt Commission of 1892, as it had received the sanction of the authors 
of the settlement of 1882. 

Bear in mind, that the public debt of which I have spoken, has no 
relation to, and does not affect the question of the West Virginia settle- 
ment, about which we read so much in recent years. After the Civil 
War in 1866, the interest on the public debt, which had been accumulat- 
ing, was funded into principal, and about six millions of new debt added. 
Interest was again funded into principal in 1871, and by the act known 
as the consolidated debt act, an act which was the death of so many 
political reputations—it was declared in round numbers that the public 
debt of Virginia was about $45,000,000, and that as West Virginia had 
gone off with a good part of the assets of the old Commonwealth and 
should bear her part of the debt as she had promised to do on the face 
of her first Constitution, West Virginia should take $15,000,000 as her 
part of the debt, and Virginia should take $30,000,000 as her part. 

This act was the Iliad of many of our woes. The $30,000,000 which 
Virginia assumed was to bear interest at six per cent., making an annual 
interest charge ef $1,800,000 per annum, when the total revenue of the 
Commonwealth, taxed to ‘its utmost, with a new school system to begin, 
was less than $2, 800,000. This annual interest charge, which left less 
than $1,000,000 to meet the total demands of the State which had been 
prostrated and dismembered was made tax receivable, and the coupons 


13 


bore the fact upon their face. No criticism is intended for those gal- 
lant souls who in order to maintain the credit of the State, attempted 
the impossible. At the present time it takes about ten per cent of the 
‘State’s gross revenue to pay the interest and sinking fund upon the 
public debt. In 1871, the legislature of Virginia devoted nearly sixty-five 
per cent. of such gross revenue. 

In 1879 the McCullough bill was passed, which proposed to reduce 
the rate of interest to three per cent. for ten years, four per cent. for 
twenty years, and five per cent. for ten years. The bonds were called 
Ten-forties. This act retained the tax receivable feature. It was in- 
effective. 

In 1882 the Riddleberger bill was passed, which scaled the debt to 
about $21,000,000, fixed the rate of interest at three per cent., and aban- 
doned the tax receivable coupon feature. Under this act about $9,000,000 
of the debt were funded, and for ten years the courts, State and federal, 
were busy with litigation opposing, and defending the State’s action. 

In 1892 the century settlement was made and affirmed by the Gen- 
eral Assembly. This act which in the suit of Virginia v. West Virginia 
has been declared to be a full and complete settlement between the 
parties was in effect, as follows: 

(1). The Riddleberger bonds already funded to stand and bear 
three per cent. 

(2). The rest of the old debt to be treated about on this plan: 
for every twenty-eight bonds surrendered of the former issues, after 
cutting off one-third for West Virginia, if not already done, there was to 
be an issue of nineteen new bonds to bear two per cent. for ten years 
and three per cent. for ninety years—the tax receivable feature of the 
coupons to be eliminated, and such bonds to be free of taxes. 

The Riddleberger act and all other funding acts were at the same 
time repealed, and a sinking fund was established to begin in the year 
1910, fixed at about $120,000 a year, until 1930, and to be about $240,000 
per annum for the rest of the period that the bonds had to run. 

Between October 1, 1893, and October 1, 1918, a period of twenty- 
five years, the public debt has been reduced $7,202,034.37 from $30,339,- 
639.32 to $23,137,604.95, and is being reduced more rapidly each year, 
as in addition to the Sinking Fund already mentioned, as about $120,000 
per annum, the State has applied to such Sinking Fund, interest on the 
holdings of the Richmond, Fredericksburg and Potomac Railroad, which 
amounts annually to about $79,000 per annum, an increase of fifty per 
cent. within the last four years, and since 1906 has allowed the Board 
of Sinking Fund Commissioners to collect interest upon the bonds bought 
for the Sinking Fund, and which amount to about $70,500 per annum. 
Such cancelled bonds are no part of the public debt and not included 
thercin. With these three items, the Board of Sinking Fund Commis- 
sioners, which consist of the Auditor of Public Accounts, the Treasurer 
and the Second Auditor, have bought the State’s bonds on the open 
market and throughout the period of the war have maintained the credit 
of the State, and the stability of her securities. The century bonds are 
selling around .80, and the Riddleberger around .88—the difference being 
due to the fact, it is said, that the last named mature and will be payable 
at par in thirteen years. No one can tell but by that time both issues 
may Le at par. Last year the public debt was reduced $331,217, of which 
$158,617 were century bonds, and $172,600 were Riddleberger bonds. 
| . Of the public debt mentioned in the beginning of this address the 
Literary Fund held as of October 1, 1918, $2,095,727.28, of which 
$515,800 are century bonds, and $1,579,927.28 are Riddleberger bonds. 

The Retired Teachers’ Fund held October, 1918, $95,1000, of which 
$85,700 are century bonds, and $9,400 are Riddleberger bonds. 

There were in the hands of the public, October 1, 1918, $18,027,- 
690.15, of which $14,353,163.27 were centuries and $3,674,526.88 were 
Riddlebergers. rs 


14 


The bonds held by the Literary Fund and Retired. Teachers’ Fund 
bear interest and are a part of the debt; but it is. interesting to know 
how much of the public debt is in the hands of the public as contra-dis- 
tinguished from what is held by the Brahe boards. Hence the last 
table mentioned. 

In round numbers it takes $840,000 a year to pay the interest ‘on 
the vublic debt, including the interest paid the Sinking Fund. already 
mentioned. The registered debt interest is mailed in January and July 
to the holders as shown by the books of the Second Auditor’s office; and 
the coupon debt interest is paid upon presentation of the interest coupons 
at such office. Nearly eighty-five per cent. of the Virginia Public Regis- 
tered debt is held in Virginia. And by analogy an equal amount of the 
coupon debt is thought to be so owned. About twenty per cent. of the 
Riddleberger debt, and about thirty per cent. of the century debt:is in 
coupon bonds. 

The State is meeting her obligations with promptness and ease, and 
the provision allowing fiduciaries who invest in her securities to be saved 
harmless is wise and salutary. Though the rate of interest is only three 
per cent., there are no taxes or levies imposable. 

i have given this account of the public debt of Virginia eet you 
may know what the present bonded debt is as a guide for future action. 
That public debt was incurred for the purpose in the main of internal 
improvements. The State used to subscribe to two-fifths of the stock 
of such companies, and sell its bonds to provide, the money so subscrib- 
taking the stock of the company. The public debt reported January 1, 
1852, was $11,971,838.30. On January 1, 1861, as determined in the 
suit of Virginia v. West Virginia, it was $338, 397, 07 2:32 53 
; So that in the nine years immediately preceding the secession of the 
State the public debt was increased $21,925,234.52. 

The question of a bond issue for roads resolves itself into the fol; 
lowing propositions: 

(a)... The ‘wisdom. of it. 

(bob). The method of it. 

The same difficulties are involved in considering the wisdom of 
a bond issue for roads as are involved in any bond issue by the State; 
and indeed are more or less related to the issue of bonds by corporations 
and individuals. There was once a theory that a national debt was a 
national benefit, based upon the idea that no people would overturn a 
government and thereby lose the obligations which the government had 
assumed. 

The arguments for a bond issue are obvious: The present needs; the 
benefits to the present generation with the burdens distributed through 
the years, so that the future which shall receive these benefits shall pay 
its part of the burdens. The arguments against a bond issue are equally 
obvious, if not so potent. Why tax the future and impose a burden upon 
posterity in which it has no voice? Why run the risk of imposing a debt 
when there may be improvements and developments that may render such 
outlay an extravagant undertaking? 

The vital questions appear to be ‘‘How well will the money be ex- 
pended?” “How well will the work be done?” “How well will the 
work be maintained when done?’’ ‘‘Will the work when undertaken be for 
the public good, or will it be used for private advancement?’’ In other 
words “will the undertaking be efficiently executed?” 

Fortunately for us, no one can question the integrity and ability 
of our Highway Commission. Its institution has been a blessing to the 
Commonwealth. Road- building has become a scientific proposition in 
which road maintenance is an essential element. The powers of the 
Commissioner are sometimes regarded with suspicion by the local au- 
thority who thinks it can, and often. can do a certain work cheaper and 
better at a certain point. Let it be remembered, however, that the com- 
ing of the Highway Commission was the coming of the scientific method. 
While Claiborne Mason might build a bridge before the engineers com- 


15 


pleted the “‘drawing,’’ the experience of mankind shows “drawings” neces- 
say. Even now clay is piled up in the autumn upon roads which should 
be left untouched till spring, and a mulch of leaves keeps the road moist 
that water may abide rather than escape from the road bed. 

(b). The method of a bond issue for roads in Virginia is a difficult 
one. Our Constitution makers remembered the troubles that Virginia 
had zone through with reference to the public debt, and provided both in 
the Constitution of 1869, and in that of 1902, that no debt should be 
contracted by the State, except to meet casual deficits in the revenue, tc: 
redeem a previous liability of the State, to suppress insurrection, repel 
invasion, or defend the State in time of war. ; 

Some have argued that the exception in the 185th section of the 
State Constitution of 1902, providing ‘‘nor shall the State become a 
party to, or become interested in any work of internal improvement, 
except public roads,’’ took roads out of the prohibition above referred 
to; but such a position cannot be maintained, as the two sections must 
be read together, and the provision in the latter section has for its 
object to prevent the State from becoming a party to any work of in- 
ternal improvement, except public roads. 

To change the provision of the Constitution will require a vote of two 
successive legislatures, and a vote of the people. So it is evident that 
about five years must elapse before there could be any bond issue for 
roads. And of course such issue would depend upon the wishes of the 
people as expressed by two legislatures, and by their own voice. The 
Constitution of Virginia has, as you see, some similarity to that of the 
Medes and Persians. It changes not, until the people twice, by their 
agents, the legislatures, and once by their majestic selves, have voted 
therefor. 

I think I have completed my part of the discussion, as it was sub- 
mitted to me, with reference to the issue of State bonds for the con- 
struction of the Highway System. 

In spite of all the demands made by the great war, Virginia has 
advanced her Highway System. She has attempted great things, and 
accomplished much. In a free country where every citizen has the right 
to express an opinion on any public question, it is always difficult to 
establish a new system of any sort. Localities differ among themselves 
as to the proper place for the highways. Self interest, often prevails 
over the public interest, and selfishness over public spirit. Men away 
from the highways as defined, feel themselves neglected. Communities 
isolated, think themselves badly treated. Yet with such difficulties the 
legislature of Virginia has not hesitated to grapple. With a strong 
body of men who made a study of the question, and who had at all times 
the aid of the Highway Commissioner, a proposition was submitted and 
accepted, and laid before the people of Virginia for consideration. 

Errors of detail may have crept in; but the study of the map shows 
a wonderful plan—-a system. 

When Rome ruled the world, from the mile stone in the forum 
there ran a system of highways into every country which she governed. 
Many of these roads survive as in the days when Caesar led his legions 
in Gaul. Many of these roads have been destroyed in the late war. The 
road is as typical of civilization as the school is. Hach is essential. Hach 
needs constant care. Let this representative body of Virginians support 
the Highway System. Let the hog wallow statesemen weep and lament 
the days when a ten-foot lane with mud up to a mule’s belly, which his 
influence had run on three sides of his plantation was his ideal of demo- 
cratic liberty; but let a broad, well graded, well kept highway run 
through his gravel fields, so that the school children and commerce-bear- 
ing vehicles, and mail carriers and country neighbors and city friends, 
and all the elements of society which make a happy land may pass and 
repass, and the salutation ‘‘A pleasant day this”: shall, as in France, 
mean, “A pleasant journey this.’’ 

ROSEWELL PAGE. 














< 














